Nurani predicts a 10% originator decline and shares his advice for beating it
The mortgage industry has been here before, with rates elevated, the refi market drying up, and businesses that grew their companies during the boom scrambling. The cycle is not new, but the advances in technology and AI make the scenario a little different this time.
Artificial intelligence has created a more direct challenge to the process-focused originator who built their value proposition around knowing guidelines and managing paperwork. Those who will succeed in this new tech age will be the brokers who have found out what AI cannot do, rather than what it can.
One California broker who has lived through multiple cycles said the industry is entering a familiar phase.
Amir Nurani (pictured top), broker-owner at Left Coast Leaders in San Diego, said the numbers are already pointing in one direction. Originator licenses are renewed every year, which makes the headcount easy to track, and he expects to see that number decline.
"I think we are going to see a minimum of a 10% decline in renewed licenses for mortgages," Nurani told Mortgage Professional America. "The volume is still contracted, and I think this is the normal part of the cycle. The cycle for mortgages is always the same. When rates drop, every lender in the United States starts a hiring frenzy. Then rates start going up, lenders go to layoffs, originators stop renewing their licenses, and you start to see a downtrend."
AI-driven downsizing
Nurani said the decline is not just about demand. AI is already compressing the workload that used to justify larger originator teams, and if every originator can handle twice the volume with demand staying flat, the math points to fewer originators.
He noted that the same dynamic is playing out across financial services. Last week, Visa announced it was cutting 7% of its staff. Earlier this week, Zillow and Google announced additional layoffs of their own.
"AI is already hitting white-collar jobs," he said. "Mortgage is not insulated from these types of shifts. AI expands the reach of the originator, but at some point it hits the demand cap. If it took 100 originators to meet the demand in a certain environment, and now every originator can do 2x the volume with demand staying static, the natural order of things is going to reduce that headcount."
He said the originators most at risk are the ones who made their name on process and product knowledge, the kind of value that AI now provides instantly and at scale.
"All of that works like it has some value on the front-end conversation when you're having it on the fly," he said. "But realistically, the value of the information you have in your head just went down because everybody now has that information. When you're talking about a process, a lot of stuff is going to get automated. Manually having a process is probably not going to be able to compete at a high level with AI automating the process."
What AI still cannot do
Nurani said the more useful question for brokers trying to survive this cycle is not whether AI will take work away from them, but rather what value brokers bring that AI cannot replace.
"What AI won't be able to do is relate to the other person in the transaction," he said. "It will not be able to create a relationship. It will not be able to create a curated experience where somebody feels that they are actually being looked after individually. If you're charismatic, if you're personable, if you listen to your customers, if you have a high level of communication and you're responsive, these things all really matter. People want to feel connected to other individuals."
He gave a recent example from his own business. A client came to him looking to pull equity out of his home to consolidate debt, an 80-year-old veteran whose wife was 10 years younger and whose children were not around. What started as a routine equity conversation ended as something very different.
"In having this conversation with them and understanding that the kids are just not in the picture, I was able to go, 'oh, you know what, this is actually the perfect candidate for a reverse mortgage," he said. "What I'm saying is the dialogue that happens to get to that conclusion would never have happened in the same capacity with AI because it required two human beings connecting."
Nurani said he ended the call with a different question altogether.
"The question I had for him was, what do you want your wife's life to look like when you can no longer be here to advocate for her?" he said. "This is not a financing discussion. The financing is just a vessel of how we're going to get from A to B. If we can get those two answers, we'll know exactly what financial product to go with."
Nurani said when it comes to figuring out how to survive alongside AI, rather than be replaced by it, it all comes down to that human connection.
“When AI first started rearing its head, the first place I looked was what is probable as far as outcome here,” he said. “One of the first places I looked was Maslow’s Hierarchy of Needs. Because that’s going to stay true regardless of what environment you’re in. And personal connection is on that list. If you can cater to that in any area, you’re going to win.”
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This article is part of our Monthly Spotlight series, which in August focuses on broker training. Full coverage can be found here.
